EV industry upbeat on Modi 3.0 with hopes of continued policy support, fresh sops

While the Modi 2.0 government has already laid the groundwork for battery-driven vehicles by implementing policies such as FAME 2, EV manufacturing Policy PLI schemes, the new government is likely to reinforce its image as the one that is promoting carbon neutrality

As the National Democratic Alliance (NDA) government returns for a third term, auto industry stakeholders seem an upbeat lot with hopes of further boost to electric vehicles (EVs) in the next five years.

While the Modi 2.0 regime (2014-2019) has laid the groundwork for battery-driven vehicles by implementing policies such as FAME 2 (valid till March 31), EV manufacturing policy, Production-linked Incentive (PLI) schemes (Rs 18,100 crore earmarked for the automobile sector and Rs 26,000 crore for advanced chemical cells for batteries), the new government is likely to reinforce its image as a proponent of carbon neutrality.

According to industry executives, the third edition of the EV incentive programme, which is also known as faster adoption and manufacturing of electric vehicles (FAME), which was under proposal, may get the green light in the next quarter.

It is widely expected that FAME-III will offer financial incentives for the purchase of electric two-wheelers, three-wheelers, and government-owned buses. However, there was no decision on including electric cars, including those bought by institutional buyers such as taxi aggregators, in the revised FAME policy.

As per industry observers, unlike the previous edition, the FAME 3 scheme would focus on the development and adoption of electric buses and electric trucks on a lager scale. Also, it is speculated that the tenure of the new scheme will be two years, lower than five years set in FAME 2.

Multiple industry stakeholders, including EV manufacturers, told Moneycontrol that notwithstanding the compulsions of the coalition government, the thrust on EV ecosystem and net zero emissions will continue unabated during Modi 3.0.

“What we see is a great move towards electric trucks and we think that the 1-tonne, 3-tonee and a 0.5-tonne trucks are very much on the forefront,” said Uday Narang,  chairman of Omega Seiki Mobility (OSM).

“We have been working on that and we are going to be putting more and more e-trucks this financial year. I think that the government should put policies as well as there should be more positive news on Fame 3 in the near future. I also see many more state governments also supporting this movement,” Narang added.

“EV share has been growing in India but at a tortoise pace. However, with the Modi government back in place and all policies pushing electric vehicles, the vehicle manufcaturers may have to gear up their electric vehicles plan considering this government is ambitious and wants to do impossible in their 3.0 tenure,” Puneet Gupta, director of S&P Mobility, said.